"I'm a company director and someone has filed our accounts without me knowing. Am I in trouble?"

At Haines Watts Service Charge we often receive questions from directors of Residents’ Management Companies regarding their obligations for filing statutory accounts at Companies House and looking for support on procedural matters for the board of directors.

A director of a Residents’ Management Company (RMC), who recently approached us to act as reporting accountants, asked the following question:

My question is mainly to do with proper procedures. I have had an e mail from our management company stating that I need to sign off the company accounts by the end of December otherwise there will be some kind of penalty applied. I had a copy of the accounts, along with other leaseholders, from our managing agent but no specific document requiring my signature. Should they send me some formal document? Will there be a penalty if I don't sign? I am sure the accounts are arithmetically correct as they are audited but whether they are right in principle I cannot say.

Our response was as follows;

A Limited Company is required to file annual accounts at Companies House within 9 months of the year end. I have checked the position at Companies House and the year end for your Company is 31 March 2018. Therefore, these accounts must be filed by 31 December 2018 to avoid the Company receiving a late filing penalty.

However, the accounts have already been filed at Companies House and I have attached them for you. They state that the accounts were approved by the Board of Directors on 19 October 2018 and they indicate that your co-director approved the accounts on behalf of the Board. Is this correct? Did you approve the statutory accounts for the year ended 31 March 2018?

As the accounts have been filed on line then there is no requirement for a signature on the accounts. However, the Board must approve the accounts and the Board should also authorise whoever is filing the accounts to file them on their behalf. This is a requirement of section 414 of Companies Act 2006 and also the company’s Articles of Association. You must discuss this with your co-director immediately and we would be happy to assist with the conversation.

On the plus side, at least you do not need to worry about a late filing penalty for this year.

If you are unsure about any entries in the accounts then you must ask for further explanations. The directors are responsible for filing accounts that comply with the Companies Act and so you both need to take reasonable steps to ensure you are happy with the information in the accounts. Again, we can assist with this matter.

At Haines Watts Service Charge we have a specialist team who can handle all company secretarial matters on behalf of RMC directors and it can be reassuring for directors to have this support. The duties and responsibilities of company directors can be onerous and these duties are not reduced just because the company is an RMC. Our overriding advice for RMC directors is to appoint experienced professionals who fully understand their issues and the leasehold sector.

Gordon Whelan is Managing Director of Haines Watts Service Charge.

The Haines Watts Service Charge Team has worked with Managing Agents, Surveyors, Landlords and Residents.

Reviewed: July 2019